February 10, 2010It's that time of year again! Sports Illustrated just revealed that this year's cover model for the annual swimsuit issue was US model Brooklyn Decker. Based on Bespoke's Swimsuit Issue Indicator, what does this mean for the market? If history is any guide, the weak start to 2010 may soon reverse.
The table below highlights the annual performance ofthe S&P 500 since 1978. For each year, we also show the country from which that year's cover model came from. Since 1978, an American has now appeared on the cover of the annual Sports Illustrated Swimsuit Issue in 17 different years. The average performance of the S&P 500 during the prior 16 years is a gain of 10.6% with 13 positive years (81.3%). Of the 16 years where no American appeared on the cover, the S&P 500 has averaged a gain of 8.2% with 12 positive years (75%).
While the S&P 500 has historically done better in years when an American has appeared on the cover, the percentage spread has narrowed considerably in the last two years. The S&P 500 declined 38.5% in 2008 when American Marissa Miller was on the cover, while it rose 23.5% in 2009 when Israeli model Bar Refaeli graced the cover. Given these exceptions, it is important to remember that there are always exceptions to the rule, and like any of the other whimsical indicators out there (Super Bowl, hemlines, etc.), you shouldn't take them too seriously. But at least they give you an excuse to read Sports Illustrated. Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.
(c) Bespoke Investment Group
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